The cell phone industry must improve the mobile music experience for consumers or risk losing out to new competitors like Apple, Warner Music Group's CEO warned Wednesday at the 3GSM World Congress.
Edgar Bronfman Jr. said in a keynote speech here that although there are already millions of music phones available throughout the world, only about 8.8 percent of people with the devices actually buy their music over the air. The reason, he said, is because such purchases are expensive, complicated and slow.
"We need to make it easy, affordable and quick to get music on mobile phones," he said. "Until we achieve this goal, we will be leaving billions of dollars on the table."
On average, Bronfman said, it can take a person 20 clicks to buy a ringtone, depending on the carrier network the consumer is using. He also complained about the fact that ringtones, full-track songs, music videos and album art are all sold in separate virtual stores.
"It's amazing we have generated as much money as we have, given how cumbersome it is to buy music," he said. "Imagine what we could do if it was fun and easy for consumers."
Bronfman said that the technology does exist today to make it easier for people to buy entertainment content on their mobile phones. He pointed to Apple as an example of how the mobile music experience meets consumer expectations.
In January, Apple unveiled its mobile phone, the iPhone, which combines cell phone functionality with the popular iPod music and video player. Initially, the iPhone will launch in the U.S. market with AT&T's Cingular Wireless service. The deal is exclusive in the United States, and Apple hasn't yet announced which carriers it will work with outside the United States. Even though the iPhone isn't expected to hit store shelves until June, it's already creating buzz throughout the industry.
"Apple has raised the bar in terms of what users expect even before the product has been released," Bronfman said. "While this presents a challenge, ultimately I think it will be positive for the industry because it's getting people excited about music phone devices. Now it's up to providers and manufacturers to fill the emerging demand."
While Bronfman wants device makers and mobile operators to make it easier to purchase entertainment on their phones, he disagrees with Apple CEO Steve Jobs when it comes to protecting mobile music and video.
Earlier this month, Jobs urged record companies to abandon digital rights management (DRM) technologies. Jobs said in an open letter posted on Apple's Web site that only about 3 percent of songs on any given iPod are purchased from the iTunes store, which, he asserted, was forced to create a DRM system to get the four largest record companies to sell songs through the store. The other 97 percent of music on iPods has been ripped from CDs that have no copy-protection technology and can be freely shared among computers and other MP3 players, he said.
Bronfman said it is important to have DRM systems that can interoperate with one other, but he also emphasized the importance of protecting copyright and ensuring that content creators and the people selling the content all get paid.
"Intellectual property deserves some level of protection on mobile phones," Bronfman said. "So I don't agree that it shouldn't be protected. But that is very different from creating interoperability among DRM technology. We can't put so much protection on content that the user experience is poor."
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